Tennessee pathologists sue Cigna over payment changes

Nashville-based Anatomic and Clinical Laboratory Associates and Clarksville-based Cumberland Pathology Associates both staff hospital laboratories across Tennessee. Each alleges at least $75,000 in monetary damages due to Cigna ceasing to pay directly for lab oversight services.

The case, filed late last month, centers on the professional component of clinical pathology services (PCCP). The PCCP pathologists oversee the lab and confirm the accuracy of results, while other pathologists perform direct testing, such as biopsies or blood tests.

According to court documents, in 2021 Cigna issued a nationwide reimbursement policy, including a decision to stop reimbursing PCCP for some pathologist groups. Cigna said it would reimburse the hospitals that pathology groups staff (a similar model to Medicaid) rather than the groups directly, as had been the case for a number of years. Since the decision was announced, Cigna has partially reversed course and declared that as of December 2022, all claims for PCCP Services would be reimbursed but at a lower rate than previously agreed, according to court documents.

The plaintiffs are asking the court to block the new payment policy and award damages of at least $75,000 each, plus legal fees. According to the suit, the policy change was part of a Cigna effort to "avoid its contractual obligations and therefore decrease expenditures and increase its own profits."

While direct-service pathologists are typically paid directly from insurance companies for processing lab samples, the pathologists performing the professional component have to bill for their services. As in the Cigna case, it is often unclear where they should bill, said Jonathan Myles, chair of the council on government and professional affairs for the College of American Pathologists.

Myles said there have been numerous lawsuits involving payment for the professional component of clinical pathology — some just to prove that it is a legitimate charge for service.

The College of American Pathologists has been directly in contact with Cigna and the organization has acknowledged that PCCP is a legitimate charge, Myles said.

"[Cigna] also indicated that the pathologist, if they are performing the service, they should bill Cigna and that if they are turned down, they have the option of appealing the denial for the service," Myles explained. "If they actually are performing the service and did not receive payment, Cigna may have paid the hospital for that service. It's up to the pathologist to get the compensation from the hospital from their oversight of the laboratory. The individual practitioner does not have access to that contract between the hospital and the insurance company. So that's what's led to confusion in the marketplace."

Lawyers for the plaintiffs — Drew Dorner, Gregory Brodek, Aimee Kumer with Duane Morris LLP out of Philadelphia — sent a statement noting that the plaintiffs are uncertain about how clinical pathology services will be reimbursed in the future.

"At the end of the day, pathologists need to be directly paid for these services, and cannot, and should not be forced to provide these services for free," the lawyers said.

On Monday the U.S. Department of Justice filed a civil fraud lawsuit against Cigna, alleging that the insurance company used false or invalid patient diagnosis codes to artificially inflate payments received through Medicare Advantage.

A few weeks prior to the pathologists' lawsuit, the Litigation Center of the American Medical Association and State Medical Societies, the Medical Society of New Jersey and the Washington State Medical Association brought a lawsuit against Cigna, alleging the company failed to pay the medical claims based on physicians' contracts with MultiPlan Corp, the same provider network of which the ACLA is a part.

The initial case management conference is set for Nov. 18 before Magistrate Judge Alistair Newbern of the Middle District of Tennessee.

Cigna did not respond to a request for comment.